Macy's Inc. (M) yesterday reported earnings of 55 cents per diluted share for the second quarter of 2011, representing a 57 percent increase in earnings per share from earnings of 35 cents per diluted share in the second quarter of 2010. Sales, operating income, net income and cash flow all exceeded expectations in the most recent quarter, as well as in the first half of 2011.

Sales in the second quarter totaled $5.939 billion, up 7.3 percent from total sales of $5.537 billion in the second quarter of 2010. On a same-store basis, Macy's, Inc.'s second quarter sales were up 6.4 percent. Online sales (macys.com and bloomingdales.com combined) were up 40.2 percent in the second quarter and 39.2 percent in the first half of 2011.

"This was our most successful second quarter and spring season in more than a decade. Importantly, it came on top of an impressive first half performance last year. To date this year, we have driven significant additional sales growth, gained market share, maintained strong margins, managed expenses and generated a very healthy level of cash," said Terry J. Lundgren, Macy's Inc. chairman, president and chief executive officer.

Macy's Inc. currently expects same-store sales in the second half of fiscal 2011 to be up between 4 percent and 4.5 percent, which would result in full-year 2011 same-store sales being up between 4.8 percent and 5.1 percent. At the beginning of the year, the company's initial guidance was for a 2011 same-store sales increase of approximately 3 percent.

Macy's Inc. also increased its full-year 2011 earnings guidance to $2.60 to $2.65 per diluted share. This compares with initial earnings guidance of $2.25 to $2.30 per diluted share provided at the beginning of the year. The stock price closed at $24.52.

Avnet earnings jump 56%

Avnet Inc. (AVT), one of the world's largest industrial distributors of electronic parts, yesterday reported full year results with sales for the fiscal year ended July 2, 2011 increased 38.5% over the prior fiscal year to a record $26.5 billion and adjusted diluted earnings per share of $4.32 increased 56% year over year. For the fourth quarter adjusted diluted earnings per share was $1.22 setting a record for the fifth consecutive quarter. The stock price closed at $25.52.

Rick Hamada, chief executive officer, commented, "The Avnet team closed out the fiscal year with another quarter of record-breaking results. Revenue for the fourth quarter increased 32.6% year over year in reported dollars to a record $6.91 billion while pro forma revenue increased 13.5%. Gross profit margin increased sequentially for the second quarter in a row as we continue applying our value-based management discipline to newly acquired businesses along with continued improvement in the western regions.”

Guidance for first quarter 2012 adjusted diluted earnings per share is expected to be in the range of 90 cents to 98 cents per share compared to 90 cents last year.

Mr Hamada said, “While it appears that the global economic recovery may be slowing, the technology markets we serve continue to lead the recovery and we are vigilantly monitoring customer and supplier input as we enter the second half of the calendar year. As we begin fiscal 2012, we are committed to building on the momentum from fiscal 2011."

About the author: ABN focuses on the earnings results of small cap companies, companies trading on lower P/E or P/BV ratios and companies with above average earnings or sustained growth. To visit ABN’s website, click here.

Disclosure: The author has no long or short positions in Avnet Inc. or Macy's Inc.

Forward-Looking Statements: Statements in this release that are “forward-looking statements” are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially.

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